Apple's App Store: Strengthening the iPhone's Competitive Position

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Case Details:

Case Code : MKTG236
Case Length : 17 Pages
Period : 2007-2009
Pub Date : 2010
Teaching Note :Not Available
Organization : Apple Inc.
Industry : Mobile phone
Countries : USA, Worldwide

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"With the amount of downloads they've had since the App Store launched last July, it must be one of the fastest rising businesses since the launch of the internet."1

- David Rowan, Editor of the technology magazine, Wired UK, in April 2009.

"Phone differentiation used to be about radios and antennas and things like that. We think, going forward, the phone of the future will be differentiated by software." 2

- Steve Jobs, CEO of Apple Inc., in August 2008.


In July 2009, a press release from Apple Inc. (Apple) stated that about 1.5 billion applications (apps) for the Apple iPhone had been sold from its App Store, within a year of its launch. This was considered quite an achievement considering the fact that Apple's highly popular 'iTunes Music Store' had only managed to sell about 70 million songs in its first year, and had reached sales of a billion only after three years. The App Store, available in over 77 countries, offered 65,000+ apps, created by over 100,000 developers (See Exhibit I for the growth in the availability of iPhone apps over time).

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1] Luke Bainbridge, "iPhone Apps Are Changing the World of Software and the Way We Work and Play,", April 12, 2009.
2] Claudine Beaumont, "Apple's Jobs Confirms iPhone 'Kill Switch',", August 11, 2008.


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